The Belgian gold franc and King Leopold II
With Belgium gaining independence from the Netherlands in 1831, the new Kingdom of Belgium introduced a year later its own coinage, referred to as Belgian francs, which was set to equal French coinage with regards to weight and composition. Though only silver and bronze coinage was minted in the beginning, Belgian gold francs were subsequently introduced in 1834, bearing the effigy of Belgium’s first king, Leopold I (father of Leopold II). The gold francs were issued in denominations of 10, 20, 25 and 40 francs, with the 20 gold franc coin being the most common. They were minted until 1865 when King Leopold I passed away.
Following the king’s death, his son Leopold II acceded to the throne that same year and the new franc coinage carrying the effigy of Belgium’s second king was released two years later in 1867. King Leopold II ardently believed that a country should have colonies and he sought to establish Belgium as a colonial power. After several years of failing to gather support from the Belgium Government for his endeavours, Leopold II instead created a private holding company that hired the famous African explorer Henry Stanley, who, in the name of scientific research, was to explore and establish a colony in central Africa. Henry Stanley did just that, prospecting deep into the territories of Congo and laying claim to newly explored land in the process. When African affairs was discussed by European nations and the United States at the Berlin Conference of 1884, Leopold managed, through skilful diplomatic means, to convince the foreign powers of the time to recognise his legitimate claim to Congo.
In 1885, the Congo Free State, a country 76 times larger than Belgium, was created, with King Leopold II as the sole ruler. Although the newly founded colony was in the beginning a huge expense for Leopold’s holding company, this would change by the end of the 19th century with the invention of bicycle and automobile rubber tyres. This led to a dramatic increase in demand for rubber, and Congo, which contained large amounts of this natural resource, became a massive source of income for Leopold’s enterprise. In fact, some sources alleged that Leopold II was at the end of the 19th century the wealthiest man in Europe, a direct result of the Congo rubber trade. Even though profit from this lucrative trade belonged to his private holding company, Leopold invested a large portion of his money in architectural and public projects in Belgium. He financed several large-scale projects, the two most famous being the triumphal arch in Brussels and the central railway station in Antwerp, earning him the epithet of “Builder King”. By the end of his rule, Congo was ceded to the Belgium Government, which continued to govern the territories until 1960.
Although King Leopold II passed away in 1909, the last 20 franc gold coin to bear his effigy was minted in 1882. An explanation of this might be that there was an influx of gold coinage from France, which was considered equal legal tender in the country as a result of Belgium’s membership of the Latin Monetary Union. Consequently, there was no need for Belgium to maintain the minting of its own gold coinage.
The Belgian franc and the Latin Monetary Union
In 1865, Italy, France, Belgium and Switzerland founded Europe’s first major currency union under the name “Latin Monetary Union”. This union was an attempt to unify the respective countries’ money into a single uniform currency. The founding members of the union agreed on a uniform fineness and weight of their coinage, which was set to equal the French silver and gold franc, and they agreed to interchange each other’s gold and silver coinage at parity, irrespective of whether it carried another design, effigy or name. The ratio of the two precious metals was likewise standardised, with 4.5 grams of silver being equal to .290322 grams of gold, a ratio of 15.5 to 1. This standardisation facilitated and simplified trade among the member countries and was seen as an appealing concept, leading other European countries to join as well. Although the union came with numerous flaws, one of them being that individual governments over-issued paper notes above the stipulated fixed ratio that was set between paper notes and circulating precious metal coinage, they were all the consequence of poor human judgement rather than the failure of the uniform precious metal coinage itself. Nevertheless, the union expanded until the advent of World War I, and came to a formal end a decade later in 1927.